The 80gb can play some/most PS2 games through software emulation, whereas the 40gb cannot play any PS2 games at all. Also, the 80gb has 4 USB ports versus 2 on the 40gb.
Other then those two things I believe they are identical, except of course for the price, hard drive size and the pack in (80gb has Motorstorm, 40gb has Spiderman 3 on Blu-ray).
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